Why Is Oneok (OKE) Up 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Oneok Inc. (OKE). Shares have added about 2.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oneok due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ONEOK Beats on Q2 Earnings, Raises '23 EPS View
ONEOK Inc. reported second-quarter 2023 operating earnings per share (EPS) of $1.04, which beat the Zacks Consensus Estimate of $1 by 4%. The bottom line also improved 13% from the year-ago quarter’s figure of 92 cents.
Total Revenues
Operating revenues for the quarter totaled $3,732 million, which missed the Zacks Consensus Estimate of $4,127 million by 9.6%. The top line also declined 37.8% from $5,996 million in the prior-year quarter.
Highlights of the Release
Adjusted EBITDA came in at $971 million, up 10% year over year.
Operating income totaled $737 million, up 7% from the prior-year quarter’s $689 million.
ONEOK incurred interest expenses of $180 million, up 5.3% from $171 million recorded in the year-ago period.
Total natural gas processed was 2,922 Billion British thermal units per day (BBtu/d), up 16.6% year over year. The Zacks Consensus Estimate for the same was pegged at 2,855 BBtu/d.
The company reported natural gas transportation capacity contracted of 7,656 million British thermal units per hour per day (MDth/d), up 5.5% year over year. The Zacks Consensus Estimate for the same was pegged at 7,257 MDth/d.
Financial Highlights
As of Jun 30, 2023, the company had cash and cash equivalents worth $106 million compared with $220 million as of Dec 31, 2022.
Long-term debt (excluding current maturities) totaled $12,742 million as of Jun 30, 2023, compared with $12,696 million as of Dec 31, 2022.
Cash provided by operating activities for the first six months of 2023 amounted to $1,993 million compared with $1,250 million in the corresponding period of 2022.
2023 Guidance
ONEOK increased its EPS estimation to the range of $5.32-$5.76 from the previously predicted band of $5.03-$5.69. The Zacks Consensus Estimate for the same is pegged at $5.55, a tad higher than the midpoint of the company’s guided range, $5.54 per share.
The company anticipates net income in the band of $2,390-$2,590 million compared with the previous guided range of $2,260-$2,560 million.
It expects adjusted EBITDA in the range of $4,575-$4,775 million compared with the former predicted band of $4,425-$4,725 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, Oneok has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Oneok has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Oneok is part of the Zacks Oil and Gas - Production Pipeline - MLB industry. Over the past month, NuStar Energy L.P. (NS), a stock from the same industry, has gained 3.7%. The company reported its results for the quarter ended June 2023 more than a month ago.
NuStar Energy L.P. reported revenues of $378.33 million in the last reported quarter, representing a year-over-year change of -12.1%. EPS of $0.09 for the same period compares with $0.19 a year ago.
For the current quarter, NuStar Energy L.P. is expected to post earnings of $0.21 per share, indicating a change of +5% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.2% over the last 30 days.
NuStar Energy L.P. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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